Market Place

Presstek comments vaguely about a mysterious settlement.

By Floyd Norris

Published: August 20, 1997

PRESSTEK INC., a company whose stock was one of the fastest climbers in the mid-1990's and is still trading at more than 100 times earnings, disclosed yesterday that it had agreed to settle charges to be brought by the Securities and Exchange Commission. But it did not say much more than that.

Presstek, which makes plates for printing presses using proprietary technology, has long been a controversial stock on Wall Street, with committed supporters and equally vocal critics.

From a price of less than $6 a share at the beginning of 1994, the stock surged to a peak of $100 on May 21, 1996, adjusted for subsequent splits. Yesterday, shares were up $1.625, to $40, before Nasdaq halted their trading before the company issued its statement. Trading resumed 16 minutes before the 4 P.M. close, and the shares advanced further to $41.25, up $2.875 for the day and $1.25 after the announcement.

Presstek, which is based in Hudson, N.H., said it had agreed, without admitting or denying the S.E.C.'s accusations, to the entry of a cease-and-desist order barring it from violating securities laws. ''The allegations by the S.E.C. giving rise to this matter relate to the accuracy of certain disclosures made by the company at various times from 1994 to 1996,'' the company said.

Which disclosures? Presstek did not say, and a spokesman said there would be no clarification.

The company also said that its chairman, Robert Howard, and its president, Robert Verrando, had reached their own deals with the S.E.C. But it gave no further information.

The announcement was highly unusual because the company said the agreement was a tentative one reached with staff members of the S.E.C. The agreement has not yet been reviewed by the commission or its senior staff, and will not become effective until the commission approves it. The S.E.C. declined to comment.

Presstek did not say whether it would pay a fine, though a spokesman said the settlement would not have a ''material adverse effect'' on the company's finances.

What are investors to make of that? The good news is that perhaps the S.E.C. problems are about to be behind the company. The bad news could be in the details of what the S.E.C. contends happened, or in the penalties it imposes on the company and its two senior officials.

There is no way to know how much effect, if any, the disclosures questioned by the S.E.C. had on the stock price as it rose and then fell back from 1994 through 1996. The stock benefited during that period from strong recommendations by a newsletter, the Cabot Market Letter, which has previously disclosed that the S.E.C. was looking into its role in the stock's movement.

A call to the newsletter yesterday afternoon was answered by a recording saying no one was in the office and requesting that callers call today.

Mr. Howard, the company's president, sold stock in 1994, 1995 and 1996, with the final round of sales coming in the days after the stock peaked. Adjusted for splits, he sold a total of 624,000 shares during the three-year period that the company said the S.E.C. was questioning the accuracy of its disclosures, and took in more than $18 million on the sales. Mr. Verrando made one sale, of 20,000 shares adjusted for a later split, and took in more than $1.1 million.